RE: STEEM: Compounding Your Way To Big Results: Warren Buffet Would Be In Awe If He Understood!!!
Thanks for taking the time to explain and make it clear! I think the 50/50 split system itself is brilliant to begin with because it 'forces' people to save and as they start seeing the benefits, it also educates them on the power of compounding interest.
One thing I still don't understand is how will the inflationary nature of STEEM (even though it is said to decrease annually over 20.5 years) affect its actual VALUE - in other words, what will STEEM be able to buy in the future? It's all a bit over my head at this point, but hey, today I got a nice payout that covers my initial investment with a profit! So I'm a happy camper and as a singer/songwriter, I can't wait to share more of my content on this platform.
Let freedom and abundance rule!
The inflation rate is presently 9.25%...it decreases roughly each year .25% meaning that next year it will be 9%. This isnt totally accurate in time because the rate is determined by number of blocks, not time, but that is the estimate since block time is fairly consistent.
In theory, the value of STEEM, all things being equal, would decrease the same 9.25% this year since there is more STEEM available. Hence, those who power up are protected against this since they will be given the amount to offset that inflation.
Of course, we also see the price increase as more users join the blockchain and more people get interested in STEEM. That is why I said "in theory". Ultimately, price action does what it wants...the market has a mind of its own.
Nevertheless, this is another reason to power up....protection against the inflation rate, which although that is decreasing from year to year, there is still more steem being produced.
OK, I see your point. As an investor though, investing (powering up) into an inflationary model with a deflation of - .25% every 300k blocks of generated STEEM built into it is SUPER CONFUSING! I'm ok with math but trying to wrap my ahead around this one is a lot :)
I wonder
I don't expect you to answer these questions, of course, I'm just putting it out there.
I believe that things that are built on essentially simple models work well. Not sure about complicated ones... The thing is, I like to understand the things I invest into but this is producing a lot of steam in my brain :)))
Other than that, I'm simply enjoying the ride for now, and if I can get back my initial investment and produce some profit, I'll be happy! However, I'll be even happier if this can become an income stream for me as an artist!
Thanks for your time and dedication, @taskmaster4450
Thank you! I need to digest all of this :)
It takes time @petrajordan but you will get it.
Do not worry about getting it all...none of us do.
Just be consistent with your action and all will work out. The system is designed for success to those who follow it.